Members of the armed forces can be of various ranks, earning varying salaries. Accordingly, military “retired pay”, similar to a pension, is a valuable (marital) asset. Retired pay is the money a retired military personnel receives every year after retirement until his or her death. Retired pay is paid by the Defense Financing & Accounting Services (“DFAS”). If the former serving spouse was married during at least ten years of military service, the spouse is allowed to receive his or her share directly from the DFAS. By about twenty years of service, a former member of the military can expect 50% of his or her base pay for “retired pay”. Congress votes on a budget to retired pay each year.
The Former Spouses Protection Act, allows states to divide the retired pay between spouses according to the state’s specific laws. In New York, valuable and classification of marital property is at the date of commencement of the divorce action. Thus, service before and after the marriage would not be calculated into retired pay. In other words, the uniform rule set forth by the National Defense Authorization Act for Fiscal Year 2017 of how military retired pay orders are written only affects people getting divorced while they are still serving. The cost-of-living adjustments will be made for the time between court order and date of retirement, though. Under the new rule, the formula for retired pay would be:
2.5% of the base pay (based on your rank) multiplied by the number of years of service
Under the new law, this base pay and number of years of service would be calculated as of the date of court order, based on the military spouse’s current rank. Then the marital fraction will be calculated based on the years of marital years/total years of service.
One major problem with this is that under the new law, this base pay and number of years of service would be calculated as of the date of court order, based on the military spouse’s current rank. Then the marital fraction will be calculated based on the years of marital years/total years of service (not up to the date of the order).
Another thing that seems unfair to a non-military spouse is the situation where the non-military spouse has a pension, which is valued as of date of retirement. It seems unfair to the non-military spouse then that the pension is calculated after more years and more seniority at a particular job than the military spouse.